My Comments to the USPTO About the SAD Scheme and Anticounterfeiting/Antipiracy Efforts

[I submitted the following comments to the USPTO]


To: United States Patent and Trademark Office, Department of Commerce
From:  Prof. Eric Goldman, Associate Dean for Research, Santa Clara University School of Law
Date:  August 22, 2023
Re: Comments regarding Future Strategies in Anticounterfeiting and Antipiracy, Docket No. PTO-C-2023-0006

I appreciate the opportunity to submit these comments regarding the USPTO’s inquiry into anticounterfeiting and antipiracy efforts.

As the USPTO knows, every IP policy creates Type I and Type II errors, i.e., some infringement will be underenforced, and some enforcements will target non-infringing behavior or even be abusive. Knowing this inevitability, every IP policy must anticipate the possibility of rightsowner over/mis-enforcement and incorporate appropriate substantive and procedural protections for victims of such overenforcements. This is especially important with respect to “anticounterfeiting” and “antipiracy” initiatives given how often IP owners mischaracterize legally permissible activity as “counterfeiting” or “piracy.”

It is impossible to discuss the current state or future strategies of anticounterfeiting and antipiracy enforcement without addressing the phenomenon of rightsowners enumerating IP defendants on sealed Schedule As, a phenomenon I call the “SAD Scheme.” I have attached a draft of an in-press article explaining the SAD Scheme, how it is being widely used and abused, and how it achieves illegitimate and unjust outcomes. Although hundreds of thousands of defendants have been sued pursuant to the SAD Scheme, the scheme frequently bypasses standard transparency rules applicable to judicial proceedings, and as a result it has received insufficient public scrutiny. Even many IP experts aren’t aware of it.

The SAD Scheme is a prime example of how rightsowners are currently misusing existing anticounterfeiting and antipiracy rules. Until the SAD Scheme is appropriately restricted, we will increasingly see rightsowners prefer it over more traditional IP enforcement techniques, such as sending takedown notices to Internet services, using rightsowner-friendly tools provided by the Internet services (such as VeRO or Content ID), and litigating against individual infringers. This means the SAD Scheme threatens to replace most current and future anticounterfeiting/antipiracy tactics. Accordingly, any discussion about anticounterfeiting and antipiracy efforts must account for the SAD Scheme and its capacity for abuse.

As part of the USPTO’s inquiry, I encourage the USPTO to take stock of the SAD Scheme’s prevalence and impact. In particular, the USPTO can help generate more public data about it and improve public visibility into the scheme. The Public Roundtable should also explore what steps the USPTO, other government agencies, and other players in the ecosystem should take to curb its scheme’s abuses.